Credit Repair    

Unfortunately if you have allowed your credit to fall into disrepair, there is really no quick fix easy way to "repair" it.

There are all kinds of "credit repair agencies" out there that claim to have the power to remove derogatory items from you credit report.   Don't be fooled, if it sounds to good to be true, it probably is.  Here is the bottom line.  There are only two entities that can remove anything from your credit file.  There first one is the creditor that put the trade line on your credit report, and the second is the credit bureau where your credit file resides. 

Generally repairing your credit involves the passage of time.   There are, however, several steps you can take to jump start the reconstruction of your credit rating.

First you need to settle any outstanding past due debts with creditors, such as balances on repossessed cars, or charged of accounts from hospitals and consumer lending agencies.  Notice the word settle.  In many cases the lender may settle your account for less than you actually owe.  Basically a lender will take the position - Something is better than nothing.  Don't expect to talk a lender in accepting 10% or 20% of the original balance, but there have been instances where they have accepted half of the balance. 

If it will not be possible for you to make a lump sum payment to the creditor, consider asking them for a payment plan for the balance or a portion of it.   Generally they will allow you to do this with no further interest accruing during the payback period.

Next you will have to reestablish your credit with a good payment history.  If you already have open accounts, all you need do is pay them on time.   They must be paid on time every month, no matter what comes up.  We are going to be looking at how you handle your credit obligations over time.  So if you come to a bump in the road, and the first thing that happens is your payments get behind, we are probably not going to be able to determine that you have reestablished yourself.

Establishing a savings pattern goes hand in hand with establishing credit.  One of the primary reasons people have credit problems is a lack of savings.   There is no "cushion" to help them through the rough spots, consequently when things get tight the dominoes start to fall.

Even if you only save $10 per paycheck, if you can show a history of consistent savings, it will be a large plus when we underwrite you loan.

Other Books In the Library

Main Library Page <> Down Payment Stratagies <> Chart of Interest Rates <> Questions To Ask A Lender <> What Are Lenders Looking For? <> Why Buy A Home <> VA Loans <> FHA Loans <> Settlement Cost Handbook <> 3 Things To Avoid <> How To Get Out Of Debt <> Understanding How To Use Credit <> Credit Repair <> Appraisals <> Title Insurance <> Credit Scores <> Automated Underwriting <>